Bitcoin takes a short hit after Tesla sells most of its holdings.

Teddy Sagi
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Bitcoin price drops after Tesla sells majority of the share

Tesla’s announcement that it sold 75% of its Bitcoin assets triggered a 50% drop in the value of the virtual currency.

After the news, the price of the largest cryptocurrency fell to $23,268.92 (£19,489), but it has since climbed back up and was last up 1.41 percent at $23,578.75.

Tesla bought $1.5 billion (£1.2 billion) of bitcoin more than a year ago, but on Wednesday, it said it had sold $936 million (£783 million) during its second financial quarter.

Elon Musk, the CEO of Tesla and a cryptocurrency supporter, said that the main reason for the sell-off was uncertainty about China, where strict COVID lockdowns have hurt the economy.

Elon Musk, the world’s richest man, said: “We are certainly open to increasing our bitcoin holdings in the future, so this should not be taken as some verdict on bitcoin.

“It’s just that we were concerned about overall liquidity for the company.”

Tesla recently reported that its total sales dropped from $18.76 billion (£15.71 billion) in the first quarter to $16.93 billion (£14.18 billion) in the second quarter.

It said that raising the prices of its most popular cars had helped to compensate for some of the problems caused by China’s COVID lockdowns.

Since the beginning of 2021, the price of the long-range version of Tesla’s Model Y in the US has increased by more than 30 percent, to $65,990 (£55,270).

Elon Musk said he thought inflation would go down by the end of the year. He had previously said he had a “super-bad feeling about the economy,” and his company promised a “record-breaking second half.”

In after-hours trading, Tesla shares went up about 1%, but they were still down about 40% from their peak in November.

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